What is the purpose of the Illinois Rider to the Franchise Agreement for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS RIDER TO THE FRANCHISE AGREEMENT
In recognition of the requirements of the Illinois Franchise Disclosure Act and the rules and regulations promulgated thereunder, the Franchise Agreement shall be modified by this document (the "Rider") as follows:
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- Background. Franchisor and Franchisee are parties to that certain Franchise Agreement dated , ("Agreement") that has been entered into concurrently with the entering of this Rider. This Rider is annexed to and forms part of the Agreement. This Rider is being executed because the Franchised Restaurant to be operated by Franchisee pursuant to the Agreement will be located in the state of Illinois and/or because Franchisee is a resident of the state of Illinois. This Rider shall be of no force and effect unless the jurisdictional requirements of the Illinois Franchise Disclosure Act and any regulations thereunder are met independently without reference to this Rider.
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- Initial Franchise Fee. Section 6.01 of the Agreement shall be amended by adding the following:
Despite the payment provisions above, Franchisor will defer collection of all initial fees owed by Franchisee to Franchisor under this Agreement until Franchisor has completed all of its pre-opening obligations under this Agreement and the Franchisee has commenced doing business. This deferral requirement has been imposed by the Illinois Attorney General's Office based on the Franchisor's audited financial statements.
- Arbitration; Jurisdiction and Venue. Sections 18.05 and 18.07 of the Agreement shall be amended by adding the following:
Despite the provision, Franchisor and Franchisee agree that any action brought by one of them against the other must be instituted in a state or federal court located in the State of Illinois.
- Governing Law. Section 18.08 of the Agreement shall be amended by adding the following:
Despite the provision above, Franchisor and Franchisee agree that Illinois law will govern this Agreement.
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- In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
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- No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Illinois Rider to the Franchise Agreement modifies the standard agreement to comply with the Illinois Franchise Disclosure Act. The rider applies if the franchised restaurant will be located in Illinois or if the franchisee is an Illinois resident. However, the rider is only effective if the requirements of the Illinois Franchise Disclosure Act are met independently of the rider itself.
One key modification in the Illinois Rider concerns the initial franchise fee. Checkers will defer collecting initial fees from the franchisee until Checkers has fulfilled its pre-opening obligations and the franchisee has started business operations. This deferral is a requirement imposed by the Illinois Attorney General's Office based on Checkers' audited financial statements.
The rider also stipulates that any legal actions between Checkers and the franchisee must be initiated in an Illinois state or federal court, regardless of what the standard agreement says. Furthermore, Illinois law will govern the agreement, overriding any conflicting provisions in the standard agreement. The rider also reinforces that franchisees cannot waive compliance with the Illinois Franchise Disclosure Act and that disclaimers or statements cannot waive claims of fraud or reliance on information provided by Checkers.